MONTREAL, QC-The Quebec government's proposed legislation, Bill 92, will abolish all private property rights to water and result in a massive transfer of wealth from Quebecers to government, concludes a new report from independent research organization the Fraser Institute.

"Bill 92 ignores the power of market forces in favour of government force. If the legislation is enacted, it will rob Quebecers of their property rights and discourage investment in the province," said Jean-François Minardi, Fraser Institute senior policy analyst and co-author of the report, The Government's Groundwater Grab: An Attack on Property Rights in Quebec.

"Nearly half of Quebec's population relies on groundwater from private wells for drinking water. This legislation is an attack on these property rights."

The proposed Bill 92 declares both surface water and groundwater to be "part of the common heritage of the Quebec nation" and off limits to appropriation "except under the conditions defined by law." This legislation, if passed, will empower government regulators to dictate who may use water, how much they may use, and how they can use it. Additionally, the government has indicated that it plans to impose water royalties following the passage of the legislation.

But Minardi and co-author, Diane Katz, Fraser Institute director of risk, environment, and energy policy, argue in the report that Quebec's water resources are not threatened and there is no need for such extreme, interventionist legislation.

"Quebec contains 20 per cent of Canada's freshwater land area and it's estimated that the renewable reserves of groundwater in Quebec's inhabited regions totals 200 trillion litres," Katz said.

"Regulations already exist that prohibit bulk water withdrawals and diversions. This proposed legislation is simply an expansion of government power over water use. This is in contrast to legal precedence in Quebec that suggests landowners have rights to groundwater beneath their property."

The report traces the history of water regulation in Quebec, pointing out that Quebec has had regulations covering water diversions for more than a decade. It also finds that the proposed legislation is riddled with vague and arbitrary provisions and grants virtually unlimited powers to the minister of sustainable development, environment and parks. Such overzealous regulation offers no guarantee that water will be apportioned wisely. Instead, it promises to politicize every aspect of water use and dissuade industrial investment.

Interestingly, the legislation also exempts water withdrawn to be marketed for human consumption, if packaged in Quebec in containers of 20 litres or less. Quebec's water-bottling industry is undergoing rapid growth and currently generates sales of $75 million a year.

Minardi and Katz suggest that rather than additional regulation, the government should look to property rights and market mechanisms, which have historically been more effective at managing resources than government regulations.

They write that a water market would allow farmers, industry, municipalities, and even environmental groups to buy and sell water rights as dictated by supply and demand. The prices would reflect the true value of water with far more accuracy than any government royalty scheme and thus better encourage efficiency and conservation.

"Well-defined property rights to resources such as water are fundamental to giving people the proper incentives for sustainable management of resources," Minardi said.

"As it is now structured, Bill 92 is an attempt by the government to establish water as a public resource and to terminate the rights of private property owners."